US stocks rise on robust profits, Dow sets record

NEW YORK, Oct 12 (Reuters) U.S. stocks rose on Thursday as a higher-than-expected profit forecast from McDonald's Corp. and several strong earnings reports from other companies pushed the Dow Jones industrial average to a record high.

In a sign of healthy consumer spending, McDonald's gave a preliminary quarterly earnings forecast that beat analysts' estimates, helped by sales of a new chicken snack in the United States and strength in Europe. Its shares rose 2.5 percent to .28. For details, see ID:nN12263408 Costco Wholesale Corp., Harley-Davidson Inc. and PepsiCo Inc.

also reported solid financial results.

''It's all about earnings this morning. After a somewhat sloppy start, the earnings season seems to be shaping up to be a strong one,'' said Barry Hyman, equity market strategist at EKN Financial Services Inc. in New York.

The Dow Jones industrial average was up 55.63 points, or 0.47 percent, at 11,907.76. The Standard&Poor's 500 Index was up 5.25 points, or 0.39 percent, at 1,355.20. The Nasdaq Composite Index was up 14.62 points, or 0.63 percent, at 2,322.89.

The Dow rose as high as 11,917.68, passing an intraday high set on Tuesday.

''The rally this year has been unabated, and we could touch any level from here, even the 12,000 mark at the Dow. The economy is certainly strong enough to sustain profit growth and profits move the stock markets. It's that simple,'' Hyman said.

Shares of retailer Costco rose 3 percent to .98 after the company said fourth-quarter profit rose, beating its lowered forecast. ID:nN12173651.

Shares of Harley-Davidson rose 0.8 percent before the bell to .71 as the company said the introduction of new motorcycles during the summer boosted sales. ID:nN12200308 The Federal Reserve's beige book of economic conditions could provide clues about the health of the economy and direction for interest rates. The beige book is expected at 2 p.m. (1800 GMT).

Shares of soft drink maker PepsiCo rose 2 percent to .55 after the company said third-quarter profit increased and raised its full-year 2006 earnings forecast. ID:nN12423946 Federal Reserve Board Governor Frederic Mishkin is due to speak at 1 p.m. (1700 GMT).

REUTERS DKS ND2048